Checking in on Connecticut’s JobsCT Tax Credit


One of the more significant tax incentive programs adopted by the state legislature and signed into law by the Gov. Ned Lamont in 2022 is the JobsCT Tax Rebate Program. 

This rebate program is designed to provide refundable tax credits for companies in targeted industries that are increasing their workforce in Connecticut. 

This new program replaces the JobsCT grant program formerly offered by the Connecticut Department of Economic Community Development and is a way to incentivize companies with credits against future tax revenue, rather than grants underwritten by bonds that are repaid with interest. 

The new program, enacted by the General Assembly as part of the 2022 budget revisions, is applicable to taxable years commencing on or after Jan. 1, 2023.

Who Is Eligible?

To qualify for the JobsCT program, a company must meet several requirements. 

It is interesting to note that professional service companies are not included in the list of eligible companies.

First, a company must be engaged in an industry related to finance, insurance, manufacturing, clean energy, bioscience, technology, digital media, or any other similar industry approved by DECD.

The eligible company must also maintain at least 25 new FTEs.

Second, the eligible company must employ at least 25 new or discretionary full-time equivalent employees by Dec. 31 of the calendar year that is two calendar years prior to the year in which the rebate is being claimed. 

The eligible company must also maintain at least 25 new FTEs in the calendar year immediately prior to the calendar year in which the rebate is being claimed. 

For example, if an eligible company would like to claim a rebate for the 2023 tax year, the company must employ the 25 new FTE employees by Dec. 31, 2021 and must maintain at least 25 new FTE employees in 2022.

Who Are Eligible FTE Employees?

The FTE of a full-time job or part-time job is based on the hours worked or expected to be worked by an employee in a calendar year. 

A job in which an employee works or is expected to work 1,750 hours or more in a calendar year equals one FTE. 

An employee who works or is expected to work less than 1,750 hours equals a fraction of one FTE, where the fraction is the number of hours worked in a calendar year divided by 1,750 hours.

An employee who works or is expected to work 1,750 hours or more in a calendar year equals one FTE. 

To count towards the 25 FTE minimum, an employee must be a qualified FTE.

A qualified FTE is paid eligible wages at least equal to the greater of either (1) $37,500, or (2) 85% of the median household income for the location where the FTE position is primarily located. 

Qualified wages means wages that are sourced to Connecticut under general Connecticut income tax guidelines. 

Excluded Employees

If an FTE does not satisfy the qualified FTE wage requirements, the individual may be designated as a discretionary FTE, which the company may apply for, and receive, a rebate for the discretionary FTE.

Of significance, a new employee will not include employees covered by any of the following three situations:

  1. Employees added through a merger or acquisition;
  2. People who were employed by a controlled affiliate in the 12 months before the eligible company applies for the rebate; and
  3. Companies that are restoring FTE eligible jobs that already existed in Connecticut after Jan. 1, 2020.

What Is the Rebate Amount?

Generally, the rebate is the greater of (1) $2,000 per new FTE, for credits earned, claimed, or payable prior to Jan. 1, 2024 (otherwise the amount is reduced to $1,000 per new FTE); or (2) 25% of the income tax witholdings that would be paid on new FTE average wages. 

The percentage is increased to 50% of the income tax witholdings for FTEs created in an opportunity zone or distressed municipality.

The percentage is increased for FTEs created in an opportunity zone or distressed municipality.

For discretionary FTEs, the amount in the first option above is reduced from $2,000 to $1,500 for credits earned, claimed or payable prior to Jan. 1, 2024 and $750 for subsequent years.

The maximum benefit per new FTE is $5,000 per calendar year.

How Does an Eligible Company Apply?

An eligible company must apply for acceptance into the JobsCT program with DECD.

Eligible companies will be required to provide significant information on the application, including, but not limited to:

  • The number of new FTEs to be created by the qualified business
  • Number of current FTEs employed by the qualified business
  • Feasibility studies or business plans for the increased number of FTEs
  • Projected state and local revenue that may reasonably derive as a result of the increased number of FTEs
  • Any other information necessary to determine whether there will be net benefits to the economy of the municipality or municipalities in which the qualified business is primarily located and the state

A rebate will not be granted until at least 24 months after DECD approves an application.

Not all applications will be approved by DECD, but if an application is not approved, DECD is required to set forth the specific reason for the disapproval. 

DECD is required to either approve or reject an application not later than 90 days after the date of its receipt by DECD. 

A rebate may be granted by DECD for not more than seven successive calendar years. 

A rebate will not be granted until at least 24 months after DECD approves an eligible company’s application for the JobsCT program. 

Once approved by DECD, the company and the agency will enter into a contract which will give DECD access to data compiled by other state agencies in order to audit the annual reports submitted by the company.

What Are the Reporting and Record Keeping Requirements?

The new program carries with it certain annual reporting requirements. 

By Jan. 31 of each year, a company claiming the credit must submit an annual report to DECD indicating the number of new FTEs created or maintained during the previous calendar year and the wages the new FTEs are earning. 

After receiving the annual report, no later than March 15 of each year during the rebate period, DECD will issue to an approved eligible company a rebate voucher that sets forth the amount of the rebate and the tax year against which such rebate may be claimed.

How Can an Eligible Company Use the Rebate?

The rebate voucher may be: (1) claimed as a credit against the corporate business tax or pass-through entity tax, or (2) claimed as an offset against the insurance premiums tax.

For taxpayers subject to the corporate business tax, the JobsCT credit is claimed after all other credits have been claimed. 

If the credit exceeds the taxpayer’s corporate business tax or insurance premiums tax liability, the excess credit will be treated as an overpayment and will be refunded, without interest, to the taxpayer.

About the authors: Louis Schatz is the chair of the state and local tax group at Shipman & Goodwin. Deanna McWeeney is an associate in the firm’s tax and employee benefits practice group.

For more information about Shipman’s manufacturing practice, please contact Alfredo Fernández (860).251.5353;


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